Danish pension fund MP Pension has decided to exclude UK security firm G4S from its investments after finally losing confidence in the company’s ability avoid behaviour which breaches the DKK131bn (€17.5bn) pension fund’s policy on responsible investment.
Anders Schelde, the fund’s chief investment officer, told IPE the decision had led to an instruction on 16 January to external managers working for MP Pension to sell off DKK13m of G4S stock.
The pension fund’s internally-managed portfolio, on the other hand, had had no exposure to the UK firm’s equity at the time, he said.
“Our managers have been reducing their exposure to G4S on behalf of us by quite a lot throughout last year, and at the beginning of this year, they only had about a quarter of the investment that they’d had in the summer of 2019,” he said.
“We’ve been engaging with the company for years and years, through our services provider.
“G4S have been on our radar for years, and when the Norwegian oil fund decided to divest in late autumn, and then KLP made a similar move in December, we put the stock on the agenda of our responsible investment committee’s January meeting,” said Schelde.
The Council on Ethics of the Norwegian Government Pension Fund Global (GPFG) said in November it had recommended the exclusion because of unacceptable risk that the company was contributing to or was responsible for serious or systematic human rights violations.
The advisory panel specifically cited labour rights violations in the Qatar and United Arab Emirates operations of G4S, where its employees were mostly migrant workers.
However MP Pension said that its own reasons for excluding the company were broader than this.
“We decided to exclude G4S from our investments because there was too big a risk that we would be continually connected to breaches of our policy by staying invested, after a series of issues over many years,” Schelde said.
G4S had been responsive, addressing some of the concerns expressed over the years by investors, and had, for example, developed human rights policies, Schelde said.
But recurrent breaches had nevertheless painted a picture of a company unable to effectively implement these policies in its operations, he added.
IPE asked G4S to comment on the divestment, but none was received by deadline.